WASHINGTON – U.S. Trade Representative Susan C. Schwab today announced that the Bush Administration will begin the second phase of its review of the Generalized System of Preferences (GSP) program, which provides duty-free treatment for goods from 133 beneficiary developing countries.

Based on information obtained since the review began in October 2005, the Administration is seeking public input to determine whether the eligibility of certain beneficiaries should be changed consistent with the statutory criteria.

"For over 30 years, Congress has given the GSP program broad bipartisan support. We believe this program serves as an important bridge for developing countries to facilitate their transition from unilateral preferences to full economic partnership," said Ambassador Schwab. "Both the United States and participating countries benefit from expanded trade under GSP, and it is important that this program be reauthorized when it expires at the end of the year."

"One of the concerns that Congress has raised is that GSP benefits go largely to a few countries, while many developing countries are not trading much under the program. We want to ensure that we are operating the program as Congress intended. The review I am announcing today, the first in twenty years, will help make certain that we are administering the program consistent with statutory criteria. Our goal is for more countries to benefit from the program and use trade in support of their economic development."

The relevant statutory criteria include: 1) certain beneficiaries’ level of economic development; 2) the extent to which they have expanded exports under the program; and 3) their competitiveness both globally and relative to GSP-eligible imports.

The Administration is also conducting a review of the current waivers to the GSP program’s competitive need limitations. These waivers allow certain products from specific countries to enter duty-free into the United States, without being subject to GSP statutory market share and annual import caps.

The GSP program allows a wide range of products from 133 beneficiary developing countries, including 42 least-developed countries, to enter the United States duty-free. The United States imported $26.7 billion under the GSP program in 2005, an 18 percent increase over 2004. Current Congressional authorization of the GSP program expires on December 31, 2006.

Comments are being sought on the following issues:

1) Whether to limit, suspend, or withdraw the eligibility of those GSP beneficiaries for which the total value of U.S. imports under GSP exceeded $100 million in 2005, and a) which the World Bank classified as an upper-middle-income economy in 2005; or b) that accounted for more than 0.25 percent of world goods exports in 2005, as reported by the World Trade Organization. The GSP beneficiaries that meet the criteria are Argentina, Brazil, Croatia, India, Indonesia, Kazakhstan, Philippines, Romania, Russia, South Africa, Thailand, Turkey, and Venezuela.